Energy

PNG is heavily concentrating on hydropower projects to meet its energy needs. Electricity from the PNG LNG project may eventually power more than half Port Moresby’s requirements PNG Power is looking at some large potential solar projects

Papua New Guinea has a national energy strategy that mostly emphasises the use of renewable sources. Construction on three huge hydropower schemes is proposed, as part of the government’s goal of increasing household access to electricity from currently 12 per cent to 70 per cent by 2030, and to provide a reliable electricity supply across the country.

In addition, solar power, LNG and biomass energy production projects are being developed.

By far the biggest prospective project is an 1800 megawatt (MW) dam project at Karimui, Chimbu Province. This US$2 billion project will take six years to build, with the work to be carried out by the Italian company Salini Impregilo.

Another large hydro scheme is the Ramu 2 Hydro Power scheme, a 180 MW hydro-electric power station on the Ramu River, in Kainantu in the Eastern Highlands Province. This US$2 billion (K5.97 billion) scheme will lift electricity generation capacity by 36 per cent according to sources at Kumul Consolidated Holdings (KCH), the state entity managing the project. The project will operate under a public-private partnership (PPP) model, with China’s Sinohydro Corporation Limited and Shenzhen Energy Group Co. Ltd awarded the contract to construct the project. Shenzhen Energy’s Director Peng Haibin said it marked a new period of closer and deeper cooperation with PNG.

A third major hydropower project was launched in Central Province in February 2017. The Edevu Hydro Power Project is expected to generate 50 MW power to boost electricity supply to Port Moresby. PNG Power will then buy power from the Chinese company, PNG Hydro Development Ltd. It will also supply power to villages in the local area.

Project Manager, Charles Gubei, says negotiations on the project began in 2009 and it has taken eight years to get to

this stage. The major funding of the K630 million has come from the Hunan Provincial Government of China, and AG Investment.

Hydropower is replacing high-cost diesel generation in smaller centres too. PNG Forest Products has three hydropower stations at Baiune in Morobe Province, with a combined installed capacity of 15 MW, while state utility PNG Power Ltd (PPL) is constructing a new 3 MW Divune hydroelectric project in Oro Province. Power from this site will feed the provincial capital, Popondetta, and the tourist town of Kokoda.

Biomass power

PNG Biomass, which is wholly owned by Oil Search has entered the Front End Engineering and Design (FEED) phase of the proposed Markham Valley Biomass Project.

The project involves using woodchips that are sourced primarily from new indigenous plantation trees grown in the Markham Valley, which is located approximately 55 km north-west of Lae. It will generate up to 15 Mw—which may go up to 30 MW— of renewable, biomass-fired, base load power for the Ramu Power Grid.

The FEED stage process will refine the technical and commercial aspects of the project, ahead of a final investment decision, which is expected before the end of 2017.

Gas

In 2015, PNG Power signed an agreement to buy LNG from Exxonmobil at half the current diesel rate to supply the capital, Port Moresby. The agreement is producing up to 25 MW of electricity (about a fifth of Port Moresby’s requirements) coming from the PNG LNG plant. This is a five-year agreement that will lapse when the PNG LNG joint venture needs the power for a third train.

At the end of 2016, Exxonmobil announced plans to build another 50 MW power plant outside Port Moresby. Andrew Barry, Managing Director of Exxonmobil PNG, said the power plant will use gas from the PNG LNG project.

‘Upon completion, the new plant will add enough power generation capacity to supply 40 per cent of Port Moresby’s peak demand, helping to meet the nation’s growing energy needs using a reliable and cleaner burning source of energy,’ he said.

Barry said the power plant will provide ‘one of the most cost-effective sources of generation for PNG Power ... we need to focus on options that can be scaled as demand increases, like the planned power project in Port Moresby. It has been designed such that it can be expanded to a total of 200 MW, as required.’ Barry added that only ‘relatively minor investments’ would be required to match supply and demand.

The initial plan was for Exxonmobil to build the plant and turn it over to PNG Power, but a private-public partnership is now being investigated. Possible interested parties include Kumul Consolidated Holdings, PNG Power, Oil Search, Kumul Petroleum, major super funds and other investors.

A 26 MW General Electric Gas Turbine generator was installed at the Lae Port in January 2016. PNG Power also commissioned the Korean company Daewoo to build a heavy oil plant at Munum, just outside Lae, which, when commissioned, is expected to generate a further 30 MW of power into the Ramu grid. A second transmission line from the Ramu 1 power station to Lae, is also nearing completion.

Solar

PNG has considerable potential for solar power, the cost of which is falling quickly. In 2016, PNG Power signed a memorandum of understanding to work with the International Finance Corporation (IFC) to establish a way for the private sector to become involved in rooftop solar.

In 2017, PNG Power also signed a Memorandum of Understanding with the Central Provincial Government and South Korean company, K&P Limited, to conduct a feasibility study into the development of a 50 MW solar farm. If it goes ahead, the electricity would be supplied into PNG Power’s Port Moresby system.

Rice supplier, Trukai Industries, has introduced a solarpowered agro-processing machine for small-scale rice processing in rural areas.

Rice Development Manager, Humphrey Saese, says solar technology does not need frequent maintenance, unlike diesel agro-machines. ‘It will be cheaper to use longer-term.’ 

UPON COMPLETION, THE NEW PLANT WILL ADD ENOUGH POWER GENERATION CAPACITY TO SUPPLY 40 PER CENT OF PORT MORESBY’S PEAK DEMAND.

Picture: Exxonmobil Gas is now become part of PNG’S powergeneration mix.